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LOCAL entrepreneur Paul Benhaim has $100 million he wants to invest in a new rural industry but there's a catch.

Unless the Federal Government agrees this year to legalise the use of industrial hemp for food consumption, his funds will go elsewhere.

The long-time hemp expert, who runs Bangalow-based Hemp Foods Australia, has been tracked down by investors who see hemp seed-derived health foods as a potential boom industry.

"These are not alternative investors; they are basically New York big-money investors who realise that hemp is a big industry ready to move forward," Mr Benhaim said.

The Northern Star reported in February that Mr Benhaim was waiting for reform of the laws, which are being held up by the Federal Government despite approval by Food Standards Australia and New Zealand in 2012.

FSANZ was asked by the Federal Government to review its decision in December 2012 and late last year the Commonwealth extended the review period until June 30.

Food Standards have proven that no matter how many hemp seeds you eat, you will never get high

The Legislative and Governance Forum on Food Regulation cited concerns that " 'branding' of this application as 'low THC hemp'... could result in public perception that the drug, cannabis, is acceptable and safe to consume".

This is nonsense, Mr Benhaim said.

"There's already regulations in place to govern the growth of industrial hemp in Australia - all they have to do is allow us to use those seeds as food," he said.

"Hemp foods are only made from products from the industrial hemp plant - there's no psychoactive properties in them whatsoever.

"Food Standards have proven that no matter how many hemp seeds you eat, you will never get high."

Mr Benhaim has $15 million "available immediately" to build a production plant.

He has found land in Victoria and northern Queensland to suit the requirements but is keen for organic farmers around Casino and Kyogle to approach him if they are serious about it.

"We want to grow a total of 500ha this year planted by September, which we would double next year," he said.

"But I can't do anything without legislative support.

"If it was to delay another year, I would have to advise them (the investors) to go outside the country."

Tasmanian independent Federal MP Andrew Wilkie has also called for the relaxing of the legislation to give Tasmanian farmers a much-needed economic boost via the fledgling hemp industry.